Martin J. Milita Jr. Esq., senior director at Duane Morris Government Strategies, offers: ”NJ Gov. Chris Christie has conditionally veto P3 Infrastructure Bill”.
Duane Morris Government Strategies (DMGS) supports the growth of organizations, companies, communities and economies through a suite of government and business consulting services. The firm offers a range of government relations and public affairs services, including lobbying, grant writing; development finance consulting, media relations management, grassroots campaigning and community outreach. Milita works at the firm’s Trenton and Newark New Jersey offices.
New Jersey Gov. Chris Christie has conditionally vetoed a Senate bill that would expand public-private partnership opportunities for government entities, calling for the removal of provisions mandating prevailing wage requirements and project labor agreements.
These modifications to S2489 would further competitive bidding for projects and reduce costs, Christie said Monday in a veto message that also recommended that the departments of Transportation, Education and Community Affairs take leading roles in building and transportation projects.
The legislation sponsored by Senate President Stephen R. Sweeney , that cleared the Senate in July, permits Local and state government units and school districts as well to enter into the partnerships, in which the private entity assumes administrative and partial or full financial responsibility for a project, according to the bill.
“While I agree with the sponsors that we must take advantage of the opportunity to improve our infrastructure through private investment, we must take care to ensure that the state has a unified plan of development that considers the impact of projects on our residents, the economic benefits of such projects, and the long term goals of the state,” Christie said in the message, which specified municipal projects and transportation work on bridges, roads and tunnels.
The departments Christie highlighted Monday in his veto message would work alongside the Economic Development Authority, which under the bill would review and approve applications and to cancel procurement after a short list of private entities is developed for projects in the public interest.
Presently only state and county colleges can enter the partnerships, according to state law. Christie cited the successes of such partnerships in Montclair State University and said others were planned or underway at Rutgers University, Ramapo College and the College of New Jersey.
The Assembly State and Local Government Committee had amended the original version of the bill to allow the use of availability payments as a financing method, to specify that a contractor is precluded from taking on projects under $50 million if the contractor contributed more than 10 percent of the project’s financing, and to eliminate the $10 million project threshold and instead require that roadway or highway projects must include an expenditure of at least $10 million in public funds or any expenditure in private funds.
Other amendments make certain lease provisions permissive rather than mandatory, exempt private entities from procurement and contracting requirements applicable to the public entities, and exempt nonprofit projects from property taxation and assessments.
The committee prohibited the bundling of multiple projects and eschewed the requirement that a government entity assign a management employee to enforce the prevailing wage requirement. They added requirements of EDA approval prior to commencing procurement of the project; that the private entity establish a construction account to fully capitalize and fund the project; and that the general contractor, construction manager or design-build team would post performance and payment bonds, rather than the chief financial officer of the public entity.
Tax breaks would apply to nonprofits, and private entities are exempt from certain procurement and contract requirements that apply to public entities, according to the legislation.
The bill was introduced in the Senate in October and then reviewed by the State Government, Wagering, Tourism & Historic Preservation Committee.
Martin J. Milita, Jr., Esq. Senior Director
Visit his blog at: https://martinmilita1.wordpress.com
Follow him on twitter: @MartinMilita1